Oil $26 or $80??? (dividend, financing, buy, companies)

[LeavingMA]

I really think when oil starts heading up it will do it fast just as how fast it came down. Also, pretty much nobody will see it coming.

[IDtheftV]

Originally Posted by Philip T

By then the High-Cost producers will have died off.

It's interesting that people tend to consider the shale producers and the tar sands producers as the high-cost producers.

The cost of lifting the oil in Venezuela and Saudi Arabia and other places with big state oil companies has to include all the social costs of subsidizing gasoline and other end products ( which are often imported ) and the social spending that is baked-in to these countries national budgets.

I saw that Saudi Arabia's national financial reserves went down by 11% in the past year since they couldn't cover their social spending costs just from oil revenues.

It's not just ( some of ) the frackers that are losing money.

If the producers in the US were really losing all that much money, then US oil production would be cratering. That's not happening.

It's hard to see what would bring the price of oil up, but today, EVERYONE seems to be looking for lower prices. When EVERYONE thinks the same thing .........

[Sage 80]

Given the fundamentals, I would expect oil to hit the low 20s before a turnaround.

[IDtheftV]

Originally Posted by Sage 80

Given the fundamentals, I would expect oil to hit the low 20s before a turnaround.

I'm surprised we haven't seen it already. It dropped below $20 in 2001 and previously, in 1999.

Originally Posted by mikeyyc

Now, if we get a full on shooting war in the mid-east, all bets are off. Especially if Russia and Turkey get hot.

There are other things that can happen besides that. Jihadists could attach infrastructure or detonate a nuke in oil production areas.

That stuff is probably what's keeping more short plays out of the market. There's too much that can make the price spike.

In the mean time, people are enjoying filling up vehicles with 30+ gallon fuel tanks for < $100.

[lchoro]

I think the price of oil is being capped by hedging and war. Oil firms have been rolling out their hedges and their production for 2016 is hedged at up to $50/barrel. All parties in the war also have to pump more oil in order to support expenditures. The Saudis have two wars to support, one in Yemen and another supporting ISIS and AQ.

[Sage 80]

Another brutal sell off for crude oil--down 5.8%. Crude oil futures hit a low of 37.50.

[cdelena]

Now that OPEC has fallen apart, Saudi is committed to pumping until fracking dies, and Iran has been turned lose, expect twenties before any price recovery.

[IDtheftV]

Originally Posted by cdelena

Now that OPEC has fallen apart, Saudi is committed to pumping until fracking dies, ...

Fracking won't die. It's a moving target. As fast as the price drops, the producers keep getting more efficient.

They are still drilling in ND, TX, others with less rigs. The wells are capped and are ready for production if they get a decent hedge.

Just because long-time felons and drug addicts can't get six-figure jobs just by showing up any more doesn't mean the industry is going to die. EVER.

What's going to die is OPEC.

[Big-Bucks]

We aren't gonna hit bottom until summer 2016 at the earliest.

[The5thOfNovemner]

Should I get more oil at 37 or should i wait till 35 ?